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RBC Home Equity Loan Formula:
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The RBC Home Equity Loan Calculator helps homeowners determine how much they can borrow against their home equity. It calculates the maximum loan amount based on your home's value, current mortgage balance, and the loan-to-value ratio allowed by RBC.
The calculator uses the RBC home equity loan formula:
Where:
Explanation: The formula calculates how much equity you can access by multiplying your home value by the maximum LTV ratio, then subtracting your existing mortgage balance.
Details: Accurate home equity calculation is crucial for financial planning, debt consolidation, home improvements, or major purchases. It helps you understand your borrowing capacity while maintaining responsible debt levels.
Tips: Enter your home's current market value in CAD, the LTV ratio (typically 0.8 for RBC home equity loans), and your current mortgage balance. All values must be positive numbers with LTV between 0 and 1.
Q1: What is the typical LTV ratio for RBC home equity loans?
A: RBC typically allows up to 80% LTV for home equity loans, but this can vary based on creditworthiness and property type.
Q2: How is home value determined for the calculation?
A: RBC will use their own appraisal or current market assessment to determine your home's value for loan purposes.
Q3: Can I borrow more than my calculated equity?
A: No, the calculation shows the maximum amount you can borrow based on your available equity and RBC's LTV limits.
Q4: What costs are associated with home equity loans?
A: There may be appraisal fees, legal fees, and closing costs. Interest rates are typically higher than primary mortgages.
Q5: How does this differ from a home equity line of credit (HELOC)?
A: A home equity loan provides a lump sum with fixed payments, while a HELOC offers revolving credit with variable rates.